In 2013 Tom McInerney was appointed CEO of Genworth Financial Inc (NYSE:GNW). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Tom McInerney’s Compensation Compare With Similar Sized Companies?
Our data indicates that Genworth Financial Inc is worth US$2.3b, and total annual CEO compensation is US$9.0m. That’s just a smallish increase of 5.0% on last year. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO compensation was US$3.5m.
It would therefore appear that Genworth Financial Inc pays Tom McInerney more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Genworth Financial has changed over time.
Is Genworth Financial Inc Growing?
Over the last three years Genworth Financial Inc has grown its earnings per share (EPS) by an average of 113% per year. Its revenue is down -8.0% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. While it would be good to see revenue growth, profits matter more in the end.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has Genworth Financial Inc Been A Good Investment?
With a three year total loss of 1.9%, Genworth Financial Inc would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
We compared the total CEO remuneration paid by Genworth Financial Inc, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. On the other hand returns to investors over the same period have probably disappointed many. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. Shareholders may want to check for free if Genworth Financial Inc insiders are buying or selling shares.
Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.